UAE national banks post Dhs7.7 billion net profit in first quarter of 2021

Eleven UAE national banks have reported circa Dhs7.74 billion net profit in first quarter of 2021, a growth of 9.6 per cent over the same period last year.

According to data issued by the these banks, six ADX-listed banks booked around Dhs4 billion in profits during the first three months of the year, compared to Dhs2.967 billion over the same period in 2020.

FAB topped the list with around Dhs2.475 billion in profit, an increase of 2.8 per cent from the same period last year. ADCB came second with AED1.12 billion in net profit; followed by Sharjah Islamic Bank, Dhs164 million; and then RAK Bank and NBQ, Dhs43 million each.

In Dubai, Emirates NBD came first with net profits worth Dhs2.32 billion during the same period; followed by Dubai Islamic Bank with Dhs846 million; Commercial Bank of Dubai, Dhs325 million; Emirates Islamic Bank, Dhs211 million; and Mashreq Bank, Dhs43 million.

Separately, Abu Dhabi Islamic Bank (ADIB) said recently that its Q1’21 net profit surged by 125 percent to Dhs608 million compared to Dhs270 million in Q1’20, and up 26 per cent against Q4’20.

The growth in net profits reflects the strong underlying performance across the business, the bank said in a statement.

Revenue increased 3.3 per cent to Dhs1,336 million from Dhs1,292 million in the same period last year with non-funding income growing by 30 percent offsetting the impact of low rate environment.

Operating Expenses were reduced by 7 per cent year-on year due to the successful implementation of technology-led initiatives that helped reduce the cost of sales and customer acquisition while also streamlining internal processes. ADIB consistently demonstrated balance sheet strength with assets growing by 6.5 per cent mainly due to a growth in customer financing by 5 percent compared to Q1 2020.

The Central Bank of the UAE (CBUAE) has recently issued a new regulation covering licensing, prudential and conduct requirements for specialised banks. Specialised banks are licensed under the CBUAE’s new regulation and are allowed to practice different financial activities to serve the local community, such as account opening, card issuance, and retail and wholesale lending. Specialised banks are permitted to provide services to UAE nationals and UAE residents only. The objective of the new regulation is to provide a regulatory framework in which specialised banks can operate in the UAE financial sector in a robust and prudent manner.

Specialised banks are allowed to conduct their activities in the UAE Dirhams only and operate according to a low credit risk model. They can be established either as a conventional specialised bank without Islamic windows, or as an Islamic specialised bank.

The regulation sets a minimum paid-up capital requirement of Dhs300 million that specialised banks must maintain and a risk-based capital adequacy requirement that they should continuously adhere to. It also sets the total consolidated assets of specialised banks which shouldn’t exceed Dhs25 billion.

ADNIC POSTS PROFIT: Abu Dhabi National Insurance Company (ADNIC) has reported a net profit of Dhs133.6 million in first quarter of 2021, a 9% increase compared to the same quarter last year.

In a statement on Monday, ADNIC said the company delivered solid performance and growth across key financial metrics. “ADNIC’s performance was driven by the company’s clear strategy, underwriting discipline, operational excellence, and a diversified investment portfolio.” Commenting on ADNIC’s performance, Sheikh Mohamed Bin Saif Al-Nahyan, Chairman of ADNIC, said: “Amid challenging market conditions, ADNIC delivered solid results for the first quarter of 2021, with net profit increasing 9% to Dhs133.6 million compared to the same quarter of last year. ADNIC’s robust financial performance is testament to the company’s strong foundations and market position.

ADNIC has continuously supported its customers and partners through this challenging period, implementing measures to ensure the seamless delivery of services. This aligns with the company’s contribution to the wider community through its backing of government initiatives and multiple CSR and charitable initiatives.” Ahmad Idris, CEO of ADNIC, said: “Our solid first quarter financial performance resulted from our ability to adapt to challenging market conditions, our digital-first mindset, and the fundamental strength of our company. We also continued to deliver on our promise of being our customers’ reliable insurer. Looking ahead, we will also continually evolve our operations and offering to deliver on our purpose and meet the needs of our stakeholders.” He added: “To support the people and communities we serve, ADNIC has continued to implement prudent safety measures in response to the COVID-19 pandemic and partnered with numerous CSR and charitable initiatives that contribute to the betterment of society.” Looking at some of the key financial highlights, underwriting discipline was maintained and ADNIC delivered solid underwriting income with 17.2% growth, compared to same quarter last year.

The growth in underwriting income was due to the high client retention ratio and to winning new business whilst maintaining our prudent underwriting approach.